The Co-operative Bank of Kenya, in partnership with the United Nations Capital Development Fund (UNCDF), has introduced a new digital financing facility designed to unlock capital for technology-driven enterprises, fintechs, and digitally enabled small businesses across Kenya.

Delivered under the Digital Platforms Kenya (DigiKen) Programme, the initiative is backed by a USD 900,000 (Ksh. 116.6 million) Loan Portfolio Guarantee Facility, capable of supporting a maximum loan portfolio value of USD 1.8 million (Ksh. 233.1 million). The primary goal is to address deep-seated financing constraints that often halt growth for early-stage and expanding digital firms.

The facility focuses on four primary segments within Kenya’s tech landscape:

  • FinTech companies
  • Digital Credit Providers
  • E-commerce platforms and digitally enabled MSMEs
  • Digital Innovation Hubs and ecosystem enablers

UNCDF will absorb 50 percent of the credit risk on outstanding loan principals extended by Co-op Bank. To encourage economic inclusion, this coverage increases to 70 percent for businesses operating in Kenya’s Arid and Semi-Arid Lands (ASALs), as well as youth- and women-led enterprises.

Co-op Bank maintains responsibility for originating, assessing, and managing all loan portfolios, offering tailored products specifically designed for working capital, business expansion, and tech infrastructure investments.

The initiative arrives at a crucial juncture for Kenya’s digital economy, where traditional lending models frequently fail to accommodate tech-driven business models.

“Kenya’s digital economy is creating exciting opportunities for businesses of all sizes, yet many entrepreneurs still struggle to access the financing needed to turn ambition into growth,” said Dr. Gideon Muriuki, Group Managing Director and CEO of Co-op Bank. “Through this partnership, we are providing practical financing solutions that will help innovative businesses invest, expand, and create jobs.”

Echoing these sentiments, Omon Ukpoma-Olaiya, Regional Investment Team Lead for East and Southern Africa and the Arab States Region at UNCDF, noted that the structure helps financial institutions rethink risk assessment.

“Many promising businesses struggle to access financing not because they lack potential, but because they do not fit traditional lending models,” Ukpoma-Olaiya explained. “We are helping financial institutions take a fresh look at opportunity, unlocking capital for entrepreneurs who can drive innovation.”

Announced ahead of the 81st UN General Assembly High-Level Week, the guarantee facility forms part of the broader DigiKen Programme, a Joint SDG Fund initiative implemented by a UN agency coalition consisting of UNESCO (Lead), UNCDF, UN Women, and UNEP, in close coordination with the UN Resident Coordinator’s Office and Kenya’s Ministry of Information, Communications and the Digital Economy (MoICDE).